Urban Empire Builders (UEB) Sdn Bhd achieved a significant milestone with the soft opening of its RM20 million Kuching Urban Transportation System (KUTS) Precast Concrete Facilities, marking a leap forward for Sarawak’s construction sector.

Deputy Minister of Public Health, Housing and Local Government Datuk Michael Tiang, who officiated the opening ceremony, lauded the facility as a pivotal development for the KUTS Red Line project and Sarawak’s infrastructure ambitions.

“Sarawak has long been a beacon of growth and opportunity in Malaysia. With its vibrant industries and rich natural resources, under the visionary leadership of our Premier, Datuk Patinggi Tan Sri Abang Johari, Sarawak continues to embark on ambitious development projects, and the demand for sustainable, innovative, and efficient construction solutions has never been greater.

“Today, we are proud to see UEB respond to this call with the establishment of this state-of-the-art facility. This plant represents more than just a physical structure, it is a symbol of progress, innovation, and commitment. With advanced technologies, high-quality production capabilities and environmentally friendly practices, this facility will not only support the growing infrastructure needs in Sarawak but also set new standards in the precast concrete industry.

“In other words, this new precast concrete facility will be a game-changer, especially for constructing the Red Line Package in the KUTS,” said Tiang.

He said this in his officiating speech at the soft opening of the KUTS Precast Concrete Facilities and Chinese New Year Celebration at the KUTS Redline Precast Plant here today.

Meanwhile, in his welcoming remarks, UEB director TS Mike Chin Yuan Tai shared that in December 2023, UEB formed a consortium with Sri Datai Sdn Bhd and CHEC Construction (M) Sdn Bhd, successfully bidding for the KUTS Red Line Package.

The project involves constructing a 12.3 km stretch, including a 6.3 km elevated section.

“UEB has been tasked by the consortium to design and build state-of-the-art precast concrete facilities for all the pier caps, beam girders, and parapet walls required for the elevated sections,” he said.

Chin emphasised the scale of the facilities, which spans 12 acres and includes an integrated project management camp featuring a project management office, staff quarters, worker quarters, a canteen, landscaped gardens, and a recreation hall.

The facilities are equipped with four heavy-duty gantry cranes ranging from 20 to 120 tonnes, a fully automated rebar cutting and bending machine, 22 production lines for prestressing girders with a 1,200-ton capacity, 14 production lines for pier caps, T-beams, and portal frames, as well as a 90m³/hour capacity concrete batching plant and storage for 400 beam girders and 100 pier caps.

Chin also highlighted that the plant is 100 per cent owned by Sarawakians, underscoring local contractors’ ability to develop and adopt advanced construction technologies.

He expressed hope that the Sarawak government would continue supporting local contractors by providing opportunities and sustainable projects, enabling them to compete locally and internationally.

“UEB is also thankful to the Premier and his vision to develop Sarawak’s infrastructure using new construction technologies, as well as Sarawak Metro’s policy of prioritising local contractors for KUTS tenders,” Chin added.

The event featured a plaque-signing ceremony, a ribbon-cutting session, and a guided tour of the facilities.

Guests were also treated to cultural performances, including a lion dance and “Cai Qing” presentation, a Yee Sang prosperity toss, and a buffet lunch.

The celebration concluded with appearances by the ‘God of Prosperity’, a lucky draw, and a singing session, reflecting the festive Chinese New Year spirit.

Also in attendance were Balingian assemblyman and Sarawak Housing Development Corporation chairman Abdul Yakub Arbi, Kuching Chinese General Chamber of Commerce and Industry deputy president Datuk Wee Kok Hui, Sarawak Metro project director Zafrin Zakariah, Sri Datai Group of Companies project director Soo Jin Ai, CHEC Construction (M) Sdn Bhd project manager Liu Tao, as well as business associates, bankers, suppliers, and sub-contractors.

Source: The Borneo Post

Urban Empire Builders launches largest precast concrete facility in Sarawak

Cahya Mata Cement Sdn Bhd, a wholly-owned subsidiary of Cahya Mata Sarawak Bhd, expects to double its clinker production capacity with the development of a new facility, Clinker Line 2, in Mambong here.

The ambitious project is set to enhance cement production capacity in Sarawak and meet the state’s growing infrastructure demands for the next 15 years, Cahya Mata Cement said in a statement on Thursday.

“Clinker Line 2 will take approximately 24 months to complete. It will incorporate state-of-the-art features to enhance both environmental performance and energy efficiency,” it said.

The new line will be developed in collaboration with Sinoma Industry Engineering (M) Sdn Bhd, following a technical consulting agreement signed in November 2023, which covered the design and subsequent construction of the clinker line, as well as optimising the existing clinker production facility.

Once completed in March 2027, Clinker Line 2 will have the capacity to produce an additional 6,000 metric tonnes of clinker daily, effectively doubling Cahya Mata Cement’s annual production capacity from 900,000 to 1.92 million metric tonnes.

The new facility will feature a waste heat recovery system capable of generating up to 6.0 megawatts of power, an advanced dust filtration system to reduce emissions by 50%, and equipment designed to lower both energy consumption and carbon dioxide emissions.

Furthermore, by utilising locally available alternative raw materials and fuels, the facility will minimise reliance on fossil fuels, reinforcing Cahya Mata Cement’s position as a leader in green cement production.

During its construction phase, the Clinker Line 2 project is expected to require up to 500 workers at its peak, providing a substantial boost to local employment, and creating opportunities for local businesses throughout the supply chain.

Once operational, the new facility will enable Cahya Mata Cement to meet the growing demand for cement in Sarawak, with a projected annual output of 2.4 million metric tonnes.

Cahya Mata Cement acting head Choong Ju Tang said the company is committed to providing a sustainable supply of high-quality cement, backed by a strong brand and a solid foundation built over more than 50 years of contributing to Sarawak’s development.

“Once the Clinker Line 2 project is approved and completed, we will be well-positioned to meet and exceed the construction industry’s demands well into the future,” he added.

Source: Bernama

Cahya Mata Sarawak’s unit expects to double clinker production with new facility

HP Inc. Malaysia has launched HP Malaysia Manufacturing (HPMM) transformation centre in Batu Kawan, Penang to drive Industry 4.0 and foster sustainable manufacturing practices.   

HP Malaysia managing director Alex Tan said the 4,639-square-foot facility embodies the company’s vision for the future of advanced manufacturing, powered by fourth industrial revolution technologies such as robotics, automation to predictive analytics.

“For HP, the facility represents our commitment to being future ready, driving innovation, embracing sustainability and preparing our workforce for the challenges of tomorrow.

“For Malaysia, the transformation signifies opportunity. It strengthens the country’s position as a global leader in the micro electrical mechanical system (MEMs) space, and aligns with the government’s industrial transformation roadmap including initiatives such as Industry4WRD and the New Industrial Master Plan 2030,” he said in a statement.

Since its establishment in 2016, HPMM has employed 1,200 highly skilled Malaysian professionals.

HPMM plays a critical role in HP’s global manufacturing ecosystem, producing and supplying inkjet cartridges to 175 countries worldwide, and is recognised as one of the world’s largest manufacturers of MEMS.  

HPMM general manager Dominic Chew said the company is also committed to sustainability and its impact on the community

 “At HPMM, initiatives like our solar photovoltaic arrays and zero waste operations team reflect our determination to reduce our environmental footprint.

“These efforts not only align with Malaysia’s sustainability goals but also with HP’s global vision of carbon neutrality and zero waste operations by 2025,” said Chew.

Source: NST

HP launches manufacturing transformation centre in Penang to drive Industry 4.0 

Proton Holdings Bhd (Proton) is boosting the production of the e.MAS 7 electric vehicle (EV) by an additional 3,000 units to cope with the high demand from customers nationwide.

Deputy chief executive officer Roslan Abdullah said the car maker previously targeted to secure 3,000 bookings for the vehicle within six months, but it surpassed the target in less than a month.

“Demand is rising, reflecting the public’s acceptance of EV cars.

“I am confident that in the next three or four years, people will scramble to use EVs and move further away from buying petrol or diesel vehicles,” he told a press conference after the launch of the Proton EV showroom at JM Otomobil (EV) in Wakaf Siku here today.

Roslan said the target group for the EVs comprises those who are interested in the latest technology.

“The price (of the EV) is not much different than that of the Proton X50 or X70. What is important is the country’s move towards zero carbon mobility,” he said.

The Proton e.MAS 7, launched by Prime Minister Datuk Seri Anwar Ibrahim on Dec 16 last year, is Malaysia’s first EV in the drive towards sustainability and green technology innovation.

Two variants are offered — Prime (priced starting from RM109,800) and Premium (RM123,800).

Proton’s first EV boasts a 12-in-1 electric propulsion system, a 16-speaker audio system, and ample legroom with 33 storage compartments.

Source: Bernama

Proton e.MAS 7 production to be boosted amid strong demand

MALAYSIA’s electric vehicle (EV) market surged nearly 80 per cent year-on-year (YoY) to more than 28,000 units in 2024, with China’s BYD, Tesla and BMW emerging as the top three brands. 

Analysts expect another strong year for the EV segment in 2025 driven by new model launches particularly from national car makers Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Proton Holdings Bhd.

Thriving ‘Green’ Vehicles

According to the Road Transport Department data, total EV registrations in the country  expanded 79 per cent to 28,048 units, representing 3.3 per cent market penetration last year.

The growth was primarily driven by the influx of multiple new EV models and the entry of new players into the Malaysian market, said CIMB Securities analyst Mohd Shanaz Noor Azam, who estimates that the Malaysian automotive market now boasts over 27 EV marques.

BYD, Mohd Shanaz said, leads the market with nearly 31 per cent share, fuelled by the introduction of three new models: the Seal, M6, and Sealion.

Tesla follows with an 18 per cent market share, driven mainly by its flagship models, the Model 3 and Model Y. Meanwhile, BMW ranks third with a seven per cent market share.

“However, BMW’s EV registrations dropped 39 per cent YoY to 1,975 units in 2024, primarily due to increasing competition in the EV space.”

Proton unveiled its first EV, the eMAS 7, in December 2024, receiving over 2,500 bookings within weeks of its launch. Perodua is set to debut its flagship EV in the sub-RM100,000 segment by the fourth quarter of 2025.

“The government’s policy of setting a minimum average selling price of RM100,000 for nonnational EVs is expected to provide a competitive edge for national brands,” Mohd Shanaz said.

Although EVs from national brands are likely to boost EV penetration this year, CIMB Securities expects rising competition within the segment, especially from Chinese players as duty exemptions for imported EV models are set to end in 2026, after which domestic assembly will take precedence.

Easing Industry Sales

The EV may continue to thrive but the same cannot be said about the overall industry sales.

CIMB Securities expects a total industry volume (TIV) of 755,000 units for 2025. This will be equal to a seven per cent YoY decline over the estimated 814,000 units sold in 2024.

The firm attributed this to potential headwinds, including the possible removal of the RON95 petrol subsidy in mid-2025 and a likely revision of the open market value (OMV) calculation method.

“Despite these challenges, we anticipate resilient demand within the sub-RM100,000 segment, which remains dominated by national brands and select entry-level models from Japanese marques,” Mohd Shanaz said.

“In 2024, we estimate that sub-RM100,000 models accounted for at least 73 per cent of Malaysian TIV, with national brands commanding over 80 per cent of this segment, while Japanese and Chinese marques represented the remaining 20 per cent,” he added.

The firm expects demand for sub-RM100,000 models to remain robust in 2025, supported by first-time car buyers and an accommodative interest rate environment maintained by Bank Negara Malaysia.

Additionally, the government’s plans to retain fuel subsidies for 85 per cent of RON95 users, as outlined in 2025 Budget, are expected to maintain affordability for the mass-market segment. 

“As a result, we expect national brands to maintain their dominance, capturing a projected 64.5 per cent market share, compared with 35.5 per cent for non-national brands in 2025,” Mohd Shanaz said.

Source: NST

Another strong year for EVs in Malaysia

After successfully producing and exporting methanol, Sarawak Petchem Sdn Bhd is now setting sights on another new product – green methanol.

Sarawak Premier Tan Sri Abang Johari Tun Openg set the wheels in motion when he performed the ground-breaking ceremony for the green methanol plant project at Tanjung Kidurong, Bintulu last week.

State-owned Sarawak Petchem chairman Tan Sri Abdul Aziz Husain said green methanol could be used as a sustainable marine fuel for the shipping industry, contributing to a significant reduction in carbon dioxide emissions, which is crucial in addressing climate change.

“This green-methanol project is an important step in our journey towards sustainable energy solutions. With this initiative, we are not only addressing the energy needs of today but also moving towards a more sustainable and climate-resilient future,” he added.

Abdul Aziz said the project would employ water electrolysis technology powered by renewable energy, along with captured carbon dioxide as feedstock in the synthesis of methanol.

Lauding Sarawak Petchem for embarking on the green methanol plant project, Abang Johari said this would serve as a global model of Sarawak’s active participation in shaping the transition to green energy.

“I just came back from Japan and Japanese firms need green energy sources to power ships in an effort to mitigate carbon emission, and they are opting to use methanol or ammonia, particularly green ammonia.

“We know that green ammonia is combined with carbon. By mixing carbon with hydrogen produced using renewable energy, like solar and hydro, we can produce green methanol,” he added.

At the event, the premier also witnessed the official departure of 20,000 tonnes of methanol from Sarawak Petchem in two vessels to China from the Sarawak Methanol Complex in Tanjung Kidurong.

Sarawak Petchem is Malaysia’s second-largest methanol producer after Petronas Chemicals Group Bhd.

According to earlier media reports, some Rm7bil had been invested in the Sarawak Methanol Complex project.

The methanol plant, which was built by South Korea’s Samsung Engineering Co Ltd, has an annual production capacity of 1.75 million tonnes.

The plant is expected to become a catalyst for future growth of the downstream oil and gas sector in Bintulu.

Meanwhile, Sarawak is expected to partner Japanese investors in a joint venture to produce ammonia and hydrogen.

A memorandum of understanding on the partnership is due to be signed in May.

Abang Johari said the planned project will produce hydrogen using the methanol-to-hydrogen process and the cyclohexane process to generate liquid hydrogen for energy.

“Additionally, hydrogen,when mixed with carbon, will produce synthetic gas, which can also serve as a new energy source.

“Japanese Prime Minister Shigeru Ishiba has asked Sarawak to collaborate with Japan to produce ammonia, and we will further use feedstock hydrogen,” he said during a townhall session here last week.

The event marked Abang Johari’s eighth anniversary as Sarawak premier.

Prime Minister Anwar Ibrahim and Abang Johari had held talks with Shiba on various issues, including transforming Sarawak into a regional energy hub, during the latter’s official visit to Malaysia recently.

And according to Deputy Primer Minister and Energy Transition and Water Transformation Minister Datuk Seri Fadillah Yusof, during the Anwar-shibaabang Johari meeting, they had discussed and jointly committed to Sarawak becoming a centre for the development of hydrogen, which will be exported not only to Japan but also other regions as well.

Japan has pledged to invest in Sarawak’s hydrogen-energy sector.

Fadillah said Sarawak’s advancement in hydrogen research has attracted investment interest from countries beyond Japan and South Korea, adding that this would help to position Sarawak as a potential primary hub for the hydrogen economy in Asia.

Anwar had expressed hope that clean hydrogen energy and decarbonisation project between Sarawak Economic Development Corp, Petroleum Sarawak Bhd (Petros) and a Japanese consortium could be facilitated by May this year.

The consortium comprises Japan Petroleum Exploration Co Ltd, GC Holdings Corp and Kawasaki Kisen Ltd.

On Feb 26, 2024, Petros, Petronas CCS Ventures Sdn Bhd and the Japanese consortium signed a Storage Site Agreement for the depleted M3 oilfield, off Sarawak.

The agreement not only enables the feasibility studies of the carbon dioxide storage sites, starting with the depleted M3 field, but also the planning of carbon dioxide storage sites, including onshore terminals and transportation pipelines as well as assessment of its technical and commercial feasibility.

Source: The Star

Sarawak sets sights on green methanol

Malaysia is gearing up to launch its second chip design park less than a year after establishing the first in Selangor, as it seeks to solidify its global semiconductor supply chain position.

Prime Minister Datuk Seri Anwar Ibrahim said Malaysia was establishing itself as a prime mover in data centres and artificial intelligence among Asean countries while advancing efforts to explore the myriad possibilities of cryptocurrency.

However, he said Malaysia must remain focused on progress rather than celebrating short-term achievements.

“Recently, we launched our National Semiconductor Strategy, which earmarks game-changing incentives and investment to make Malaysia indispensable to the global semiconductor supply chain.

“(Malaysia) is already the world’s sixth largest exporter of semiconductors and is now aiming to move further up the value chain through a targeted focus on front-end activities.

“And we are hitting the ground running: in the coming weeks, we will launch our second chip design park less than a year after our first,” he said during his lecture entitled “The Adaptive Edge: Malaysia’s Global Strategy in an Uncertain Era” at the London School of Economics and Political Science today.

Anwar, who is also finance minister, said that while Malaysia is moving forward in semiconductor development, it is also making efforts to do this sustainably.

“Malaysia is committed to moving away from existing conventional power generation, increasing renewable energy composition to 70 per cent of the total generation capacity by 2050.”

Malaysia previously launched its first semiconductor integrated circuit (IC) design park in Puchong as part of Malaysia’s plans to move up the value chain in the semiconductor industry and “Made by Malaysia” ambitions.

The Malaysia Semiconductor IC Design Park, set up in collaboration with the federal government, international semiconductor firms, and venture capitalists, aims to position Malaysia as a potential powerhouse in the global IC design industry.

The strategic initiative is designed to leverage Malaysia’s technological capabilities and resources, foster innovation, and advance the country’s reputation in high-tech manufacturing and design.

The park site was meticulously chosen after an extensive evaluation process among the locations in Klang Valley.

Anwar: Malaysia solidifying global semiconductor position with 2nd chip design park

NexV Manufacturing Sdn Bhd (NMSB) and Global NEV Technology Sdn Bhd (GNEV) have inked a memorandum of understanding (MoU) to explore strategic collaborations in the assembly and manufacturing of new energy vehicles (NEVs) in Malaysia.

A joint statement said the collaboration aims to enhance the NEV ecosystem in Malaysia, and will initially focus on knocked-down operations while GNEV intends to enter into a contract assembly arrangement with NMSB.

“The primary objective of this MoU is to establish a framework for collaboration between NMSB and GNEV in developing Malaysia’s green technology facility dedicated to manufacturing and assembling NEVs.

“Specific activities under the MoU will be detailed in a definitive agreement, which both parties aim to sign by mid-February 2025,” it said.

Once a definitive agreement is signed, the collaboration may see its first commercial electric vehicle roll out from the NMSB’s production line as early as the first quarter of 2026 (1Q 2026), the statement said.

NMSB, a joint venture between Careplus Group Bhd and GoAuto Group Sdn Bhd, aims to lead Malaysia’s transition to sustainable and green automotive technology by constructing the country’s first dedicated green technology manufacturing facility.

The NEV plant in Chembong, Negeri Sembilan, is set to open in 2Q 2025, and will support Malaysia’s shift to sustainable mobility while boosting the economy and creating jobs in the region.

Source: Bernama

NexV Manufacturing, Global NevTechnology ink partnership for commercial EV assembly

Maintenance, repair and overhaul (MRO) services are poised to become the primary area of collaboration between Malaysia and the United States (US) in the aerospace sector, according to the US International Trade Administration’s international trade specialist Stefanie Merchant.

Merchant emphasised the critical role of engines and engine parts in the US aerospace industry, and therefore, Malaysia could play a key role in meeting this demand.

“The opportunities extend to general parts for fixed-wing aircraft, encompassing components as varied as nuts and bolts to larger structures,” she said during the SelectUSA Webinar: Investment Opportunities in the US Aerospace Market on Wednesday.

She also called on Malaysian companies to engage with major US aerospace manufacturers to understand their supply chain needs, to pave the way for strategic partnerships.

Merchant further pointed out that MRO services in the US were expecting unprecedented demand, with the growth being supported by the integration of digital tools and artificial intelligence, to streamline processes such as blade inspection and maintenance record management.

“The need for skilled labour in this sector is also rising to meet the growing workload,” she noted.

Moreover, Merchant said the increasing demand for parts to support fixed-wing aircraft production, including landing gear, and the robust market for engine MRO services in North America, is expected to account for 22.5% of global demand this year, which presents further opportunities for collaboration.

Additionally, she pointed to broader growth in commercial markets with dual defence applications, including unmanned aircraft systems and propulsion systems, in which demand has surged due to spillover effects from defence to commercial applications. 

Meanwhile, National Aerospace Industry Corporation (NAICO) Malaysia chief executive officer Prof Shamsul Kamar Abu Samah said the entity is heavily investing in developing future-ready professionals for the aerospace sector in Malaysia. 

He said this mission was in line with the New Industrial Master Plan (NIMP) 2030 to position Malaysia as a global aerospace hub, while focusing on innovation, fostering strategic partnerships, and ensuring sustainable growth in this critical industry.

Malaysia’s aerospace exports reached an impressive RM4.87 billion, while imports stood at RM10.93 billion from January to October 2024.

“We have shown resilience and growth with key markets like Asia Pacific and Europe, driving demand for our aircraft parts and components.

“This is a testament to Malaysia’s robust aerospace supply chain, and our growing reputation on the global stage,” he added.

Source: Bernama

MRO services to drive Malaysia-US collab in aerospace sector, says trade specialist

Sarawak aims to expand its involvement in the aerospace sector by collaborating with a company in Tokyo, Japan, to produce textiles designed for astronaut use.

Sarawak Premier Tan Sri Abang Johari Openg emphasised the importance of incorporating low-carbon elements in the textile production process, aligning with the state’s green economy agenda.

“We prioritise low-carbon methods in producing textiles from liquid gas used by astronauts.

“Currently, we are working with a company in Tokyo to develop low-carbon materials based on chemicals to create the textiles. Perhaps one day, astronaut suits labelled ‘Made in Sarawak’ will become a reality,” he added.

Abang Johari said this in response to a question during a town hall session, Eight Years With The Honourable Premier of Sarawak, last night.

During the session, Abang Johari expressed his vision of transforming Sarawak into the “Norway of the East” by fostering a stable economy and efficiently managing its resources.

He said Norway shares similarities with Sarawak in its strengths in oil and gas while also excelling in clean energy and advanced technology.

“If there is an economic crisis in Europe, Norway remains unaffected because of its effective resource management. This is why I envision Sarawak becoming the Norway of the East,” he stated.

Abang Johari emphasised that achieving this goal requires swift action and diligent efforts to elevate Sarawak to the highest level of progress.

“We must strive to reach that standard and work tirelessly. That is why I am focusing on advancing efforts in various fields, including education and engineering,” he added. 

Source: Bernama

Sarawak collaborates with Japan to produce textiles for astronauts

NEGRI Sembilan, on track towards attaining developed-state status and progressively moving towards a digital-centric economy, has outlined plans to attract more investments to further boost revenue and achieve its vision to become a prosperous, inclusive and sustainable state by 2045.

Taking advantage of its strategic location and proximity to the country’s main airports and seaports, the state administration plans to open more industrial areas especially the greentech and high technology industries to achieve this.

Negri Sembilan industrialisation and non-Muslim affairs committee chairman Teo Kok Seong said the state government has taken a proactive approach and hopes to open at least 10 new industrial areas in the state in stages in the coming years to meet this objective.

“As of now, we have more than 50 industrial areas in Negri Sembilan with proper infrastructure facilities.

“Of these, only the Techpark@Enstek phase 2 in Bandar Enstek and Springhill Industrial Park phase 1 and 2 in Port Dickson still have lots to be sold,” he said, adding that at the other industrial areas, there were only ready-built factories or godowns that were available for sale or rent to interested investors.

Realising that the state was quickly running out of industrial areas to cater to all types of industries, it came up with a plan to aggressively open more areas in the next four years to meet rising demand.

He said two industrial areas should start operating this year.

“The 514-acre Hamilton City Industrial Area in Nilai by Sime Darby Properties, which is the first project under the Malaysia Vision Valley 2.0 should be ready this year.

“The 100-acre Kelisa Mewah Industrial Area in Sg Gadut by Azza Mewah Sdn Bhd earmarked for light industries will also be ready for occupancy in the first quarter of this year,” he said.

Teo said the 523-acre SPD Techvalley Industrial Area in Senawang by Seri Pajam Development, being developed under the “greentech” concept in a guarded area, would be ready by 2026.

“This industrial area will be built under the Smart Sustainable Managed Industrial Park concept and is the first in South-East Asia to be awarded the Leadership in Energy and Environment Design for cities and the industry community.

“This area will also strictly comply with ESG standards,” he said.

Apart from SPD Techvalley, three more industrial areas will be opened in 2026.

The first is the 616.6-acre phase three of Techpark@Enstek at Bandar Enstek by Tabung Haji Properties.

“This particular area will focus on the halal industry hub, cleantech and high technology industries,” he said.

The next project, Teo said, is a 760-acre Vision Business Park integrated development (Parcel B) in Labu by Sime Darby Properties.

He said a section of the industrial area will be reserved to support light- and medium-scale industries.

The third, he said, was the 179-acre Springhill Industrial Area (phase 3) in Port Dickson by West Synergy Sdn Bhd which will focus on high-tech light- and medium-scale industries.

Two industrial areas that would be opened in 2027 are the 837-acre NS Semiconductor Valley in Senawang by NS Corporation.

“This investment, which will be in collaboration with the private sector, will focus on high technology industries such as electric and electronics and semiconductor,” he said.

Teo said 2027 will also see the opening of the 122-acre Sikamat Industrial Area in Sikamat by GD Holdings which will cater for the light- and medium-scale industries.

In 2028, the state will have two more industrial areas.

The first is the 2,382-acre MVV TechPark in Labu (Parcel B) by NS Corporation which will be built in collaboration with N9 Matrix Development.

“There will also be a NS Smart Park in Labu (Parcel B) by NS Corporation which is a joint venture with the private sector. The 1,281-acre area will house data centres, smart manufacturing facilities, aerospace, logistics and services industries,” he said.

On Dec 18 last year, the state government signed yet another agreement to develop an industrial park in Bukit Pelandok, Port Dickson.

The understanding between NS Corp, on behalf of the state government and SD Guthrie Bhd and Eco World Development Group Bhd will see the development of a 1,166-acre industrial park with a gross development value of RM2.95bil.

The project, to be developed over an eight-year period, will target both local and foreign investors and help create high-value jobs to further drive the state’s growth agenda.

The industrial park, will among others have industrial lots, ready-built factories and commercial properties that will cater to high-growth sectors such as aerospace, electrical and electronics, logistics and biotechnology.

Teo said the state government has also been attracting healthy investments in recent years which augurs well for its economic growth.

In 2018, the state received RM1.6bil in foreign direct investment (FDI) and another RM1.26bil in domestic direct investment (DDI). In 2019, the FDI increased to RM1.85bil while DDI saw a massive jump to RM5.1bil.

“The following year, the FDI increased further to RM3.8bil and the DDI was RM4.1bil. In 2021, we got RM3.35bil in DDI and RM2.4bil from foreign investments,” he said.

Teo said the state continued to attract investors in 2022 with foreigners pumping in RM6.58bil with another RM2.3bil from domestic investors.

History was made in 2023 when the total investments received went beyond the RM10bil mark. That year, another RM6bil came from abroad while domestic investors put in another RM4bil into the state.

For the first half of 2024, the state had already received investments totalling some RM3bil.

A proposal for the development of a special industrial cluster in the central region and the construction of a smart container port in Port Dickson will also expedite growth in Negri Sembilan and further solidify the country’s position as an investment hub.

The federal government has in principle agreed to the proposal which will include the Federal Territory of Kuala Lumpur, Selangor, Negeri Sembilan and Melaka.

Through the initiative, they hope to attract more high-quality investments in the manufacturing sector in the central region.

The Negri Sembilan Digital Economy Blueprint, a five-year strategic plan aimed at developing a foundation for a digital-centric economy, will also be realised by 2027.

The core of the blueprint rests on the establishment of a digital-powered government, a digital-driven industry, and a digital-ready society.

Within the government, priority will be placed on digitalising-related services and kick-starting the journey towards transforming key Negri Sembilan areas into smart cities.

This blueprint aims to complement the vision of the Negri Sembilan Development Plan 2021-2025 and the Negri Sembilan Structural Plan 2045 towards becoming a prosperous and sustainable state.

Source: The Star

New industrial areas to spur growth

Sarawak is exploring partnerships with international aerospace firms and research institutions to facilitate knowledge and technology exchange while driving innovation to diversity the state’s economy, said Datuk Patinggi Tan Sri Abang Johari Tun Openg.

The Premier believes that these collaborations will create high-value jobs in design, engineering and production, helping to attract and retain top talent.

“While oil and gas remain significant, we will focus on high-value industries such as biotechnology, aerospace and advanced manufacturing, which align with global trends, leveraging cutting-edge technology to enhance our competitiveness.

“The aerospace industry, in particular, holds immense growth potential. With increasing demand for satellites, drones and aerospace components, Sarawak can capitalise on its strategic location and growing infrastructure to establish itself as a hub for advanced manufacturing and innovation,” he said at the Majlis Amanat Perdana Premier Sarawak 2025 held at the Borneo Convention Centre Kuching today.

Abang Johari said he had launched the Aerospace Academy at the Centre for Technology Excellence Sarawak (Centexs) in Lundu, which is designed to equip the state’s workforce with specialised skills in areas such as aerospace engineering, drone technology, satellite manufacturing and maintenance, repair and overhaul (MRO) services.

He said such bold step signifies the state’s commitment to excel in the aerospace sector.

“Collaboration is key. We are working with universities, industry leaders and experts to create tailored training programmes for high-value sectors like advanced manufacturing, digital technology and renewable energy.

“These partnerships will ensure that our workforce remains agile and well-prepared for the emerging demands of these critical industries,” he added.

Complementing these efforts is the development of a comprehensive Industry 4.0 ecosystem that integrates advanced technology across industries and establishing new industrial zones for high-tech projects such as semiconductors, lithium batteries, data centers and green energy under the 13th Malaysia Plan (13MP), he pointed out.

He said financing and incentives for research and development will be enhanced, with collaborations involving global research institutions to foster innovation and technological advancement.

“At the core of this transformation is the commitment to building an integrated supply chain ecosystem and promoting digitalisation to enhance competitiveness. Regulatory frameworks are being streamlined to improve the ease of doing business, and significant investments are being made in workforce training and upskilling.

“Plans are also underway to establish Free Industrial Zones integrated with port development and establishing hubs for aerospace and space industries,” he added.

Abang Johari said Sarawak also recognises that the mineral mining sector remains a cornerstone to its economic strategy, and his administration aspires to unlock the full potential of this sector by advancing both upstream and downstream industries to generate greater value.

“We stay committed to sustainable mining. In June 2024, Sarawak undertook a technical study trip to Canada for better understanding of the mining ecosystem and adopting best practices in legal frameworks, new technologies and community engagement.

“Additionally, a key focus was on the rehabilitation and conservation of former mining sites to integrate sustainable practices into the sector. These efforts highlight our determination to balancing economic growth with environmental stewardship and inclusivity,” he added.

Source: The Borneo Post

Premier: Sarawak explores aerospace partnerships for economic diversification

Sarawak’s advancements in hydrogen research have attracted investment interest from countries such as Japan and South Korea, positioning the state as a potential primary hub for the hydrogen economy in Asia, said Deputy Prime Minister Datuk Seri Fadillah Yusof.

According to Fadillah, Japan has expressed interest and committed to investing in Sarawak, particularly in the hydrogen energy sector, following Sarawak Premier Tan Sri Abang Johari Openg’s meeting alongside Prime Minister Datuk Seri Anwar Ibrahim during the recent visit by the Japanese Prime Minister Shigeru Ishiba to Malaysia.

“In that meeting, they discussed and jointly committed that Sarawak will become a centre for the development of hydrogen energy, which will be exported not only to Japan but to other regions as well. Japan has shown interest and pledged to invest in Sarawak, particularly in the hydrogen energy sector.

“Sarawak’s research in hydrogen is already quite advanced. The interest isn’t only from Japan and (South) Korea. Their technology is undoubtedly more advanced, which is why they want to invest here, making Sarawak the preferred destination for such investments,” he told reporters when met during the inaugural Inns of Court Malaysia (ICM) East Malaysia Grand Night 2025, held at Borneo Cultures Museum here last night.

The event was graced by the Yang di-Pertua Negeri Tun Pehin Sri Dr Wan Junaidi Tuanku Jaafar and his wife, Toh Puan Datuk Patinggi Fauziah Mohd Sanusi.

Fadillah, who is Energy Transition and Water Transformation Minister, said the development of hydrogen energy is expected to have a transformative impact on the economy of both Sarawak and Malaysia, with hydrogen, as a clean energy source, holding the potential to replace even nuclear energy in the future.

“Insya-Allah, our hope is to become the leading hub for the hydrogen economy in Asia,” he added.

Meanwhile, during his speech at a dinner themed ‘Diversity and Inclusivity in Nation Building,’ Fadillah encouraged the attendees, who included legal practitioners and judges from Peninsular Malaysia, Sabah, and Sarawak, as well as statesmen, corporate counsel, academicians, and law students, to join the Inns of Court Malaysia (ICM).

“Tonight, organising committee chairman, Tan Kee Heng, has requested me to remind everyone of the importance of ICM membership. If you are not yet a member, I encourage you to join. Membership fosters fellowship, goodwill, and collaboration within our profession.

“I have been convinced to become a member of ICM, so I encourage all members from Sarawak and Sabah, especially, to join. Let us come together to make legal practice a better place for all of us, where practitioners and the entire legal fraternity can unite under one roof,” he said.

Among those present at the event were ICM president Tun Arifin Zakaria and Tan, who is also ICM Sarawak executive committee member.

Source: The Borneo Post

DPM Fadillah: Sarawak’s hydrogen research draws interest, investments from Japan, South Korea

RHB Investment Bank Bhd (RHB Research) believes Malaysian technology firms will face limited impact from the US plan to tighten export restrictions on artificial intelligence (AI) chips.

“While the indirect impact is difficult to ascertain, we note that local tech supply chains are insignificant in the global AI supply chain. “We remain optimistic of a stronger 2025 on the back of a sector recovery, fuelled by firmer broad-based demand and the replacement cycle,” it said in a note today.

The US is planning to impose further restrictions on the export of AI chips, as it aims to curb the use of these chips in data centres (DC) globally, targeting both countries and companies.

According to RHB Research, if the restriction comes into effect, it will likely affect data centre (DC) expansion plans, especially outside Tier 1 countries including Malaysia.

However, it noted that most of the new AI DCs in Malaysia are US-owned. “Also, the 1.4 gigawatt (GW) capacity that is live (not all are AI DCs), under construction, or committed is well under the seven per cent threshold of the current 20.4GW DC size in the US alone (not including other Tier 1 countries), while the new 2.8GW capacity is still in the early stages. “

“Hence, we believe the impact will be more evident for Chinese DC developers/offtakers dealing with more advanced AI chips,” it said.

Furthermore, RHB Research said that the new restrictions could impact supply chains within the graphics processing unit (GPU) and central processing unit (CPU) server ecosystem.

However, only a few local companies are directly affected.

The firm added that the potential curbing of AI-related chip exports, a major growth driver for the current semiconductor upcycle, could trigger a sector-wide slowdown, impacting the entire supply chain.

Companies such as Vitrox Corp, Mi Technovation, and Pentamaster, which produce semiconductor equipment, and Frontken Corp, which supports the largest fabrication plant, may experience slower sales.

Engineering support providers and front-end equipment manufacturers, including UWC, Sam Engineering, and Coraza Integrated Technologies, could also face reduced demand.

Investors continued to selldown construction and technology stocks with the indices down 0.74 per cent and 0.76 per cent respectively.

The Bursa Malaysia construction index tracks 49 construction-related stocks, while the technology index tracks 48 technology-related stocks.

Source: NST

Malaysian tech firms to see limited impact from latest US AI chip curbs – analyst

Prime Minister Datuk Seri Anwar Ibrahim has expressed hope that the clean hydrogen energy and decarbonisation collaboration project between Sarawak Economic Development Corporation Energy (SEDCE), Petroleum Sarawak Bhd (Petros) and a Japanese consortium could be facilitated by May this year.

Petros, Petronas subsidiary CCS Ventures Sdn Bhd and Japanese consortium parties, comprising Japan Petroleum Exploration Co Ltd, JGC Holdings Corporation and Kawasaki Kisen Kaisha Ltd, signed a storage site agreement (SSA) for the M3 depleted field offshore Sarawak, Malaysia, on Feb 26, 2024.

The SSA not only enables the feasibility studies of the CO2 storage sites starting with the M3 depleted field (M3 CCS Project), but also the planning of the CO2 storage site development, including onshore terminals and transportation pipelines, as well as assessment of its techno-commercial feasibility.

Anwar, who is also the finance minister, said the collaboration is expected to succeed, particularly as Sarawak Premier Tan Sri Abang Johari Tun Openg has given his assurances regarding the project’s development, along with the support of Japan’s Prime Minister Shigeru Ishiba.

“We will hope to facilitate this as soon as possible, to be able to meet some deadlines, let’s say by May when we meet either in Tokyo or in Kuala Lumpur,” he said after the joint press remarks with Ishiba in conjunction with the Japanese premier’s two-day official visit to Malaysia which started yesterday.

Anwar also thanked Japan for its long-standing relations with Petronas in the area of liquefied natural gas, with Japanese companies now involved in the country’s carbon capture utilisation storage via Petronas’ clean energy policy and through the delivery of carbon-neutral LNG cargo to Shikoku Electric Power and Hiroshima Gas.

Commenting briefly on the rare earth elements (REE) sector, Anwar said he hopes to get Japan’s involvement in the development of an REE processing plant.

During the joint-press remarks, Anwar said he had mentioned the formation of the ASEAN Energy Grid linking Laos, Thailand, Malaysia, and Singapore, and the initiative by Sarawak for an undersea energy cable from Sarawak to Peninsular Malaya and Singapore. “This requires participation from Japan, other than the countries involved,” he added.

Anwar earlier emphasised that trade and investment issues have been a top priority during the visit by Japan’s Prime Minister and his delegation, alongside matters pertaining to higher education.

Ishiba said Japan has agreed that it would strengthen collaboration with ASEAN in the area of supply chain resilience.

“We also agreed to deepen cooperation on the Asia Zero Emissions Community (AZEC) and to advance collaboration in the area of green transformation between the two nations. To ensure energy security and achieve decarbonisation, we will enhance cooperation in areas such as ammonia-fuelled gas turbines, CCS (carbon capture and storage), hydrogen, and LNG. This will include cooperation in Sarawak,” he said.

Ishiba, currently on a two-day official visit to Malaysia, was accorded a formal welcoming ceremony at the Perdana Putra Complex today.

Malaysia’s ties with Japan have grown from strength to strength with the elevation of bilateral relations to a Comprehensive Strategic Partnership in December 2023.

Japan is a key economic partner for Malaysia, with a total of 2,821 manufacturing projects involving Japanese participation implemented in Malaysia as of June 2024. These projects represented investments worth RM105.2 billion (US$30.4 billion) and have generated employment for almost 345,000 people.

Source: Bernama

PM Anwar hopes Malaysia-Japan hydrogen energy project could be facilitated by May 2025

Nvidia’s significant investments in Malaysia are relevant for the country, as the company focuses on specialised chip architectures, strengthening Malaysia’s position in the global chip supply chain, said an expert.

Nvidia’s collaboration with YTL brings a total investment of RM20 billion to Malaysia.

Professor of International History, Prof Dr Chris Miller, at The Fletcher School, Tufts University, noted that while Nvidia is the world’s largest chip company, it primarily designs chips and does not engage in manufacturing, packaging, or assembly. Despite this, he noted that Nvidia remains the largest chip company by market value.

“I think this trend and growing focus on chip design is highly relevant for Malaysia as it seeks to diversify its position in the chip supply chain and take on an even bigger role in the future,” he said at the Malaysia Economic Forum 2025 held here yesterday.

He said major tech firms like Nvidia, which specialise in special-purpose chips solely for artificial intelligence (AI), are where the advancements are occurring most rapidly.

“This is why the world’s biggest technology companies are becoming chip designers. Microsoft, Alibaba, Baidu, and Facebook are all designing their own chips, realising that having chips tailored to their exact needs makes them more capable of running the AI workloads they require,” he said.

Miller added that specialisation is a key driver of progress, but also increases the power and influence of the largest tech companies, giving them access to higher-quality, lower-cost computing than other players in the economy.

This forces companies to push the limits of physics and chemistry as they bring more computing capabilities together.

He noted that a trend called advanced packaging is reshaping the chip industry.

“All of this has significant implications for countries like Malaysia, which, of course, is far from a newcomer in the chip industry,” he said.

“Malaysia has been an integral part of the multinational semiconductor supply chain for half a century. This means Malaysia has both real opportunities and I think, extraordinary challenges arising from this shift in the supply chain.”

Regarding Malaysia’s semiconductor strategy, Miller opined that the geopolitical landscape presents both opportunities and risks, making neutrality difficult in such a strategic industry.

“The geopolitical landscape, the fracturing of supply chains, and the politicisation of every segment of chip design and manufacturing will force Malaysian companies to consider not only the economics of supply chains but also the politics, even in segments that might not have seemed sensitive in the past are increasingly politicised today,” he said.

Miller also pointed out that Malaysia’s strength in packaging and assembly will see increased research and development, and value-added services (though with more competition from advanced economies).

“The packaging and assembling capabilities where Malaysia excels today are undergoing dramatic change, driven by trends in advanced packaging. Every AI processor today depends on new packaging capabilities, which are set to reshape the packaging landscape,” he said.

Source: Bernama

Nvidia’s investment with YTL strengthens Malaysia’s position in global chip supply chain

The US-China tech war continues to have a significant impact on the global semiconductor market, resulting in semiconductor chip companies rethinking their global supply chain strategies amid trade restrictions and sanctions on China.

As companies look to diversify their production away from China, Malaysia stands to benefit from increased investment and business opportunities.

US-based Micron Technology Inc. is among chipmakers betting on Southeast Asia, aiming to tap into new markets and reduce their reliance on China and Taiwan in response to US-China tensions.

It recently announced a US$7 billion (RM31.5 billion) investment over the next several years to expand its manufacturing footprint in Singapore, driven by the growing demand for advanced memory chips fuelled by AI.

Micron Technology also has a significant presence in Malaysia, having started in Muar in 2010 before expanding with two facilities in Penang.

Meanwhile, global GPU design tech giant Nvidia’s RM20 billion investments, in collaboration with YTL Group, is expected to strengthen Malaysia’s position in the global chip supply chain.

Prof. Dr. Chris Miller, a professor of international history at The Fletcher School, Tufts University, said that the trend and growing focus on chip design is highly relevant for Malaysia as it seeks to diversify its position in the chip supply chain and take on an even bigger role in the future.

He said major tech firms like Nvidia, which specialise in special-purpose chips solely for AI, are where the advancements are occurring most rapidly.

“This is why the world’s biggest technology companies are becoming chip designers. Microsoft, Alibaba, Baidu, and Facebook are all designing their own chips, realising that having chips tailored to their exact needs makes them more capable of running the AI workloads they require,” he said at the Malaysia Economic Forum 2025 here, recently.

The global semiconductor industry, a cornerstone of modern technology, has witnessed remarkable growth alongside notable challenges in recent years.

Fueled by rising demand for chips driven by advancements in artificial intelligence (AI), 5G, automotive electronics, and consumer devices, Malaysia is positioned at a critical point within the global semiconductor supply chain, according to industry experts.

Data from the US-based Semiconductor Industry Association (SIA) shows that global chip sales soared to a record US$57.8 billion in November 2024, reflecting a 21 per cent year-on-year increase.

Projections from the World Semiconductor Trade Statistics (WSTS) indicate continued robust growth, forecasting a 12.5 per cent rise in 2025, with the industry’s valuation expected to reach US$687 billion.

While potential new US restrictions on AI chip exports have raised concerns, analysts anticipate minimal impact on Malaysia’s semiconductor sector.

CHIPPING AWAY AT THE IMPACT

Malaysia has long been a key player in the global semiconductor sector, serving as a vital hub for chip assembly, testing, and packaging. 

The country’s well-established electronics industry and its advanced infrastructure make it an attractive destination for global semiconductor companies, a home to some of the world’s leading chipmakers, including Intel, Texas Instruments, and Infineon, which rely on local facilities for manufacturing and assembly.

As of November 2024, electrical and electronics (E&E) products valued at RM51.03 billion and accounted for 40.3 per cent of total exports increased by 12.2 per cent from the same month in 2023.

Despite the US plan to tighten export restrictions on AI chips, analysts believe that Malaysian technology firms will experience only a limited impact.

Bloomberg reported that the Biden administration is preparing to impose a new round of export restrictions on AI chips, specifically targeting Nvidia’s graphics processing units (GPUs), in a final effort to limit the spread of advanced technology to adversarial nations like China and Russia.

However, Kenanga Investment Bank Bhd analysts Cheow Ming Liang and Peter Kong do not foresee any obstacles to the operations of local tech businesses.

They noted that NationGate Holdings Bhd, the sole original equipment manufacturer (OEM) partner of Nvidia in Malaysia and a smaller OEM partner in the Asean region, anticipates minimal impact from the GPU export quotas. 

“A significant portion of its business stems from Singapore, with deliveries made according to client requests. Moreover, NationGate supplies AI servers to Nvidia-approved cloud partners, which are likely already cleared by US authorities,” they added.

Cheow and Kong also expect minimal impact for YTL Power International Bhd, given its priority access to Nvidia’s chips as a cloud partner. 

RHB Investment Bank Bhd analyst Lee Meng Horng said that while the indirect impact is difficult to measure, local tech supply chains are insignificant in the global AI supply chain.

He remained optimistic of a stronger 2025 on the back of a sector recovery, fuelled by firmer, broad-based demand and the replacement cycle.

He said that the new restriction could affect supply chains that are in the ecosystem of GPU and central processing unit (CPU) servers but only a few local companies are directly affected, such as NationGate and PIE Industrial Bhd, given their businesses in the AI-server/switches assembly businesses.

“The potential indirect impact on other outsourced semiconductor assembly and test (OSAT) players, such as Malaysian Pacific Industries Bhd and Unisem (M) Bhd, is expected to be minimal. 

“This impact is primarily limited to their exposure to certain power management chips used in the server and industrial segments, which could experience slower output due to reduced server production,” Lee added.

GOVERNMENT’S MISSION

Economy minister Rafizi Ramli recently said that Malaysia plans to produce its own GPU chips in 5-10 years time amid the growth of data centre investments in the country.

He stated that the country is expected to be a global powerhouse in data centres in the years to come.

“If we are able to realise the potential to downstream our semiconductors instead of doing back end, we are hoping that we can start producing ‘Made by Malaysia’ GPUs and chips in the next five to ten years.

“Then not only do we create a new high economic value sector that serves our own demand, we can also become a global player,” he said during a fireside chat at Forum Ekonomi Malaysia.

Meanwhile, Khazanah Research Institute (KRI) said the country needs more local chip manufacturers like Silterra Malaysia Sdn Bhd to address the presently high rates of skill-related underemployment.

Loss-making Silterra, which was created in 1995, was sold by Khazanah Nasional Bhd to Dagang NeXchange Bhd (DNeX) and Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Centre (Limited Partnership) for RM273 million in 2021.

KRI research associates Azfar Hanif Azizi and Yin Shao Loong, in a report entitled “Building a Sustainable Industrial Base: Malaysia’s Green Transition,” highlighted the importance of modernising state-owned enterprises or incentivising firms to transition into tech-centric sectors to create skilled jobs.

In addressing the shortage of talent for high-value, knowledge-intensive jobs and the current underemployment of Science, Technology, Engineering, and Mathematics (STEM) graduates, KRI said Malaysia needs to create companies that can employ these graduates.

“If current prospects for employment are dim, students will avoid studying STEM in university, shrinking the talent supply. This can be addressed through state-owned firms, which have been tried before in the electrical and electronics (E&E) industry (Silterra).

“However, it failed to expand and upgrade due to a lack of capital and ambition and thus could not continuously absorb talent. Any future attempts at such a venture require a greater willingness by the state to take risks,” KRI said in the report.

Source: NST

Malaysia stands to benefit from robust chip potential amid US-China tensions

Industry key to economic growth in 2025 due to export value

The semiconductor industry is expected to remain the golden goose for national economic growth this year.

Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said the export value of the local semiconductor industry that ranged between 38% and 40% last year was expected to remain consistent in 2025.

“In fact if you took the other industries and added them up together, their export value only comes up to around 40% and the semiconductor industry covers the rest. In terms of trade surplus, we are also the highest,” he told The Star on the sidelines of the Asean Economic Leaders Conference Outlook for 2025 held here yesterday.

Wong said that last year, there was strong anticipation for the semiconductor industry to take off drastically, but this did not happen.

“The focus was mainly on artificial intelligence, and unfortunately we are not there yet. This is one of the main reasons why our industry did not experience what we were expecting.

“The electric vehicle (EV) sector also did not do exceptionally well, it took off then plummeted both here and globally,” he added.

Wong said despite global projections that growth could surged up to 16% for the industry, Malaysia was unlikely to see double digit growth.

“I think it will be more of a single-digit growth, and we will only be able to tell from the second quarter onwards. Typically, the first quarter is always a weak one for the sector. So we will have to wait and see what happens,” he pointed out.

Wong hoped that the EV sector would bounce back alongside smart equipment manufacturing, including wafer fabrication (FAB) equipment manufacturing, which will give the industry the boost it needed.

“We want to bring in foreign direct investment for FABS because this cost a lot of money. If we are talking about mature FABS we are looking at around Us$3bil while high-end FABS could go into the region of Us$10bil to Us$20bil.”.

Wong said the idea was to have more FABS here so that an entire ecosystem could be built up, including material supplies, technical supplies and servicing.

He also described the National Semiconductor Strategy (NSS) as one of the best announcements made by the government last year, adding that it allowed Malaysia to gain traction and put it on a strong footing in the industry.

“In terms of getting recognition and reinforcing the importance of the role Malaysia can play, the NSS certainly helped. So we have reset some very aggressive targets for the NSS and the challenge now will be on how we can execute it,” he said, adding that one of the biggest barriers for players within the industry was breaking through the first success.

“We need to gather more momentum, because once we have our first success, more companies will see the growth and opportunities there and want to be a part of it. So we need that push,” he added.

Source: The Star

Semiconductors to shine

Khazanah Research Institute (KRI) has called for the set up of more companies like Malaysia’s first chip maker Silterra Malaysia Sdn Bhd to address the presently high rates of skill-related underemployment.

This time around though it needs more capital and ambition to ensure it meets its objectives.

Silterra was created in 1995 to nudge Malaysia higher up the semiconductor value chain from merely being an assembler of chips.

In 2021, Khazanah Nasional Bhd sold the loss-making Silterra to Dagang NeXchange Bhd (DNeX) and Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) for RM273 million.

The report entitled “Building a Sustainable Industrial Base: Malaysia’s Green Transition” authored by Azfar Hanif Azizi and Yin Shao Loong, examines the challenges faced by Malaysia’s industries, such as electric and electronic (E&E), solar photovoltaic (PV) and resource-based sectors, in upgrading technologically and economically.

Among its key recommendations is to modernise state-owned enterprises or incentivise firms to transition into tech-centric sectors to create skilled jobs.

KRI said to address the shortage of talent for high-value, knowledge-intensive jobs and the current underemployment of STEM graduates, Malaysia needs to create companies that can employ these graduates.

“If current prospects for employment are dim, students will avoid studying STEM in university, shrinking the talent supply. This can be addressed through state-owned firms, which have been tried before in the electrical and electronics (E&E) industry (Silterra).”

“However, it failed to expand and upgrade due to a lack of capital and ambition and thus could not continuously absorb talent. Any future attempts at such a venture require a greater willingness by the state to take risks,” it said in its report.

KRI suggested that to tackle potential competition issues, companies should be given conditions to meet and follow merit-based standards when hiring and firing, particularly for top executives.

Another way to boost firm creation is by encouraging local businesses to enter the market through trade and industrial policies, such as subsidies, procurement, and managed competition, especially for those already in related industries with relevant skills.

This method encourages multiple entries in the sector and avoids problems of a lack of competition, a common problem when relying on a single state-owned enterprise to drive the industry.

Other key recommendations to upgrade Malaysia’s capabilities in E&E and solar include reorienting research and development (R&D) policies to encourage innovation within firms, supported by universities and government research institutions for technology transfer.

It also calls for green policies to be balanced with climate adaptation strategies to ensure industries are resilient to climate impacts.

KRI’s other recommendations include exploring new tax measures and using monetary financing to overcome fiscal constraints and implementing affirmative actions to support marginalised groups, including the Orang Asli, in accessing green job opportunities.

These strategies aim to build a sustainable, innovation-driven economy and ensure equitable participation in Malaysia’s green industrialisation.

Source: NST

Malaysia needs more companies like Silterra – but with more capital and ambition

The rubber gloves sector is expected to continue to gain traction in 2025, supported by continuous earning recovery, higher volume sales, improving supply-demand dynamics and potential increases in average selling prices (ASPs).

According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), the stage is set for the rubber gloves sector to see strong earnings recovery in the coming year as there are indications pointing towards a strong demand recovery supported by inventory rebuilding from distributors and faster-than-expected industry consolidation.

“Specifically, there has been an uptick in orders over the past three quarters. The rise in demand comes as the inventories of major distributors across all regions have returned to normal levels,” said the research arm in an analysis.

They pointed out that Hartalega Holdings Bhd (Hartalega) for one is about to set to see their sales volume increase to 2.5 billion pieces per month in the second half of its financial year 2025 (2H25) while Top Glove Corporation Bhd (Top Glove) has continued to see a 10 to 20 per cent month on month (m-o-m) uptrend in its sales volume since Nov 2024 and is expecting to see replenishment activity pick up in subsequent quarters.

The oversupply issue is also expected to be less acute in 2025 as the research arm notes that players have been actively culling production capacity via the decommissioning of selective plants and the exit of new entrants.

“Based on our estimates, the demand-supply situation will only start to head towards equilibrium in 2026 when there is virtually no more net new capacity coming on stream while the global demand for gloves continues to rise by 15 per cent per annum underpinned by rising hygiene awareness,” they opined.

Moreover, the US imposition of tariff ratchets up to 50 per cent in 2025 and 100 per cent in 2026 for Chinese origin gloves will make Malaysian glove makers the prime beneficiaries as US customers look for alternative sources due to the resulting increased ASPs of Chinese origin gloves.

“If we assume a base case ASP of US$19 per 1,000 pieces for Chinese gloves, a 50 per cent tariff hike is expected to raise Chinese glove producers’ ASP to US$25 per 1,000 pieces.

“This compares with Malaysian players’ ASPs which currently sit at US$18 to 21 per 1,000 pieces, and we expect Malaysian glove makers to benefit from the US import tariff hike from 7.5 per cent to 50 per cent on Chinese glove imports in 2025,” the research arm reasoned.

That said, there are concerns that Chinese players will begin to flood other markets in order to offload their stock which may result in mixed effects for local players.

However, Kenanga Research believes that the net effect of the US tariffs will be positive for local players as any volume loss in non-US markets will be able to be offset by higher demand from the US as the US historically accounts for 35 to 40 per cent of Malaysia’s total glove volume.

“We believe that given the current geopolitical tensions between the US and China, and the tariff hike, American buyers are less likely to source most of their supplies from China. As a result, buyers are diversifying their sources, opting to purchase from other countries including Malaysia,” they mused.

“Some buyers have already begun shi ing their purchases to Malaysia as a risk management strategy, which could potentially benefit Malaysian players including Hartalega, Kossan Rubber Industries Bhd (Kossan), Top Glove, and Supermax Corporation Bhd (Supermax),” they added.

Overall, the uptick in demand for rubber gloves is expected to cause local ASPs to inch up gradually, potentially reaching US$20 to US$22 per 1,000 pieces in 2025.

This uptick in demand has prompted local rubber glove players to forecast that ASPs may inch up gradually by US$1.00 and potentially reach US$20 to US$22 per 1,000 pcs in 2025.

In contrast, Kenanga Research’s 2025 ASP assumption is slightly more moderate at US$20 to US$21 per 1,000 pcs.

Overall, Kenanga Research maintains and ‘overweight’ call on the rubber glove sector with their top picks being Hartalega and Kossan due to their more sizeable US sales exposures.

Source: The Borneo Post

Glovemakers will continue to gain traction in 2025

AS an important link in the global semiconductor supply chain, Malaysia has largely benefited over the past eight years from its neutral stance in the US-China trade war.

However, with tensions escalating under Donald Trump’s second term as US president, concerns are growing over Malaysia’s chip future as new challenges may include the potential of BRICS (Brazil, Russia, India, China and South Africa) nations being the target of US tariffs.

As recently as late November, Trump had threatened to impose 100% tariffs on BRICS nations if they were to create a rival currency to the US dollar. For the first time in many years, industry players are genuinely worried that Malaysia could be caught in the crossfire.

Already, the US Commerce Department has imposed high anti-dumping duties of up to 271.2% on solar products from Malaysia, Thailand, Vietnam and Cambodia following complaints from American manufacturers that big Chinese solar panel makers with operations in these countries were flooding the US market with unfairly cheap goods.

Will Malaysia’s semiconductor industry be subjected to similar trade measures?

Adding another layer of complexity, Malaysia is now a BRICS partner country, having joined the bloc in October. A partner country is basically an observer state that receives support from BRICS members, even though it has not yet been officially accepted as a member.

BRICS, originally comprising Brazil, Russia, India and China, was established in 2009 as a cooperation platform for emerging economies, with South Africa joining a year later. Chaired by Russia this year, the trade bloc now collectively accounts for one-fifth of global trade.

For perspective, Malaysia’s semiconductor sector plays a critical role in the global chip supply chain as the world’s sixth largest semiconductor exporter, contributing around 13% to the global chip testing and packaging industry. Globally, about 6% to 7% of semiconductor trade flows through Malaysia.

Malaysia’s strong presence and active participation in the supply chain have historically enabled the country to thrive and strengthen its position, particularly in the wake of the “great decoupling” between the US and China in the tech cold war.

Tariff dispute remains a concern

Will Malaysia’s decision to join BRICS impact its economic ties with the US and its role in the global supply chain? Can Malaysia continue to benefit from the trade war, or is this advantage fading as global trade shifts further?

Pentamaster Corp Bhd co-founder and executive chairman Chuah Choon Bin acknowledges that Malaysia’s economic ties, particularly with China, could expose it to indirect risks from tariffs or trade restrictions, even though it is not a BRICS member.

However, adopting a clear economic strategy — such as advancing the digital economy to promote e-commerce and tech-driven industries, implementing attractive investment policies, fostering global integration and trade, as well as maintaining a neutral diplomatic stance — may help mitigate these risks.

“The possibility of being involved in tariff disputes, particularly within the semiconductor industry, remains a concern if Malaysia continues to play a role as an OSAT (outsourced semiconductor assembly and test) country,” he tells The Edge.

While Chuah expects the country’s semiconductor industry to remain stable in the near future, he warns that the sector could face challenges if technology trade tensions escalate with further heightening of trade sanction policy during Trump’s second term.

Malaysia approved RM254.7 billion in investments during the first nine months of 2024 (9M2024), reflecting a solid 10.7% growth year on year, compared with RM230.2 billion in the same period a year before.

The electrical and electronics (E&E) sector maintained its dominant position as the country’s top manufacturing sector, attracting RM47 billion in approved investments in 9M2024, although it was 18% lower than RM57.3 billion in the same period a year ago.

The semiconductor subsector accounted for over 90% of the E&E investments in 9M2024, demonstrating its pivotal role in advancing the National Semiconductor Strategy towards its RM500 billion target in investments for the sector.

The key priority for Malaysia, says Chuah, is to develop strong foundations in technology and intellectual property (IP), particularly in research and development, such as having our country’s own integrated circuit (IC) design for advanced devices and advanced technology equipment.

“This will help mitigate the impact of trade restrictions, as the global demand for high-tech components and devices continues to grow. By shifting focus towards high-tech products, Malaysia can boost its competitiveness even in the face of tariffs.

“Therefore, it is crucial for the government to support local technology companies with grants and incentives to accelerate investment in development of proprietary Malaysian IP such as IC design and advanced technology equipment,” he stresses.

Additionally, Malaysia must diversify its markets by exploring new opportunities in Europe, Asia and emerging economies. Participating in free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will create alternative export channels for the semiconductor industry, says Chuah.

He opines that Malaysia could reduce its reliance on the US markets by leveraging its BRICS partnership, aligning with technology-driven nations, and strengthening its position in global semiconductor supply chains.

“This approach would help mitigate US tariffs and create new growth and collaboration opportunities within BRICS,” he adds.

High tariffs will be disastrous

QES Group Bhd co-founder and managing director Chew Ne Weng observes that BRICS will potentially welcome a few new members from the region, including Malaysia, Vietnam, Thailand and Indonesia.

“All these Asean nations will focus more on neutrality and trading instead of going into an anti-West stance. Malaysia has stated clearly, we want to be independent and stay neutral in the geopolitical tensions between the US and China.

“With the looming Trump 2.0 coming into power in the next few weeks, I don’t think Malaysia’s semiconductor sector will be his priority target. After all, most of the American and European multinational corporations’ (MNCs) back-end plants are in Malaysia,” he explains.

Chew says imposing high tariffs on these MNCs will be disastrous for the whole ecosystem of test assembly plants around the Southeast Asian region. Therefore, he believes Trump will not act irrationally against the chip sector.

He says Malaysia should continue to aggressively attract semiconductor companies from the US, Europe, Japan and South Korea to expand their operations or invest in the country, by offering attractive incentives, transparent and stable policy, as well as a good pipeline of talent. “Against this backdrop, Trump 2.0 will be risking global isolation if the semiconductor segment in Malaysia is still being targeted by the US for imposing high tariffs.”

Chew predicts that Malaysia will continue to be in a comfortable position for the next three years, if the government stays neutral and “not offending the US too much” in terms of policies on business and foreign affairs.

He reiterates that unlike the solar panel makers, heavy tariffs are unlikely to be imposed on semiconductor manufacturers around the Asean region as they originate from either the US, Europe, Japan or South Korea, with just a handful from China.

“Most of the solar panel manufacturers located in Asean originated from China. The tariffs imposed are targeting China solar panels manufacturers,” Chew observes.

Is Trump bluffing?

TT Vision Holdings Bhd co-founder, CEO and executive director Goon Koon Yin recognises the potential impact of possible US tariffs on the BRICS nations, as it could introduce a new layer of complexity that would hinder the industry player’s business operations and near-term performance.

However, given Malaysia’s significant involvement within the global semiconductor supply chain, coupled with the country’s long-standing partnerships with the US-based firms, he believes this will offer some form of insulation from direct fallout.

“The key challenge will depend on how we are able to maintain this balance, leveraging our relationships with both the US and BRICS nations without being overly reliant on one another. Trump’s claim of imposing tariffs on BRICS is more likely a negotiation posture and we see low likelihood of implementation,” Goon remarks.

Nevertheless, he agrees that the imposition of anti-dumping duties on solar products from Malaysia and other Southeast Asian countries could signal an increasing willingness by the US to scrutinise other industries, including semiconductors.

Goon is of the view that Malaysia could adopt a multi-pronged approach to protect the semiconductor industry from the potential fallout of US tariff implementation. This could include diplomatic engagement, which would require Malaysia to advocate its role as a reliable and neutral partner in the semiconductor supply chain.

Furthermore, the government could also implement certain initiatives to promote enhanced collaboration between the MNCs to further deepen their footprint in Malaysia, which could also help protect the industry from any sudden trade disruptions.

He points out that the narrative of the US-China trade war is evolving. Initially, Malaysia emerged as a key beneficiary of the trade tensions, attracting investments amid diversifying global supply chains.

But with the US’ increasing scrutiny on Southeast Asia as seen with its anti-dumping duties, Malaysia’s semiconductor sector faces growing challenges.

“Malaysia’s ability to maintain neutrality while navigating its BRICS affiliation will prove to be the key in determining the nation’s future trajectory,” says Goon.

As for TT Vision, he says, the group sees the evolving market dynamic as an active opportunity to capitalise on its strategic position within the value chain by fostering stronger relations with companies within the BRICS bloc, particularly those in China and India which may want to mitigate their risks by increasing reliance on Malaysia.

‘Malaysia will continue to be beneficiary’

UWC Bhd deputy group CEO Dr Matin Ng Chin Liang says Malaysia’s “partner country” status in BRICS enables the country to prioritise trading decisions that best serve the nation’s economic interests, while avoiding unnecessary alignment with geopolitical blocs.

“Malaysia’s recent application to join BRICS may have implications for the economic and strategic positioning, particularly in relation to its semiconductor industry’s role in global supply chains.

“Greater engagement with BRICS could offer potential opportunities for market diversification, technological collaboration and trade ties, but any changes in tariffs or trade policies would need to be assessed carefully,” he warns.

Ng adds that Malaysia’s ability to manage its relationships within BRICS alongside existing global partnerships will play a role in ensuring the semiconductor industry remains competitive and integrated within the global supply chain. “Malaysia’s strategic importance in the global semiconductor supply chain, supported by the presence of multiple industry-leading MNCs, minimises the risk of significant exposure to potential US tariffs.

“Unlike countries perceived as direct threats to US interests, such as China — which faces additional tariffs of 10% — or Mexico and Canada with proposed tariffs of up to 20%, Malaysia occupies a crucial supporting role in the supply chain. This positioning ensures Malaysia is viewed as a collaborative and essential partner rather than a competitor.”

Taking these factors into consideration, Ng believes Malaysia’s semiconductor industry will continue to benefit from trade tensions in the coming years. “The tariffs on Chinese exports may redirect US import demand towards other countries, including Malaysia. This trend mirrors what occurred during the initial phase of the trade war in 2020 when Malaysia’s exports to the US rose by 2.4% year on year to RM46.15 billion.

“If the trade war intensifies in the future, we anticipate a similar upward trend in Malaysia’s trade performance, positioning the country as a continued beneficiary of these global shifts in supply chains.”

TA Securities research manager and tech analyst Tony Chan Mun Chun concurs that Malaysia is likely to experience a net positive impact from trade diversion and relocation.

“Although the possibility is there, I think the chance is slim that tariffs will be imposed on the whole bloc. Instead of targeting BRICS as a bloc, I believe the focus will be on specific countries. For example, China and Russia will likely remain the main targets.

“At the end of the day, the US still needs someone to handle the back-end testing and packaging, and Malaysia remains a popular destination due to its political neutrality and well-established ecosystem,” he says.

Chan also believes Malaysia should seek to diversify its export markets beyond the US by strengthening trade relations with other regions.

“One way for Malaysia is to have regular dialogue with US policymakers to gauge where the red line is, and make sure we don’t cross it,” he suggests.

Earlier this month, the US launched its third crackdown in three years on China’s semiconductor industry, restricting exports to 140 companies. The new rules target shipments of advanced memory chips and chip making tools to China.

According to Reuters, the restrictions include limits on shipments of high-bandwidth memory chips used in advanced technologies like artificial intelligence training, as well as new controls on 24 chip making tools, three software tools and equipment made in countries such as Singapore and Malaysia.

The crackdown affects nearly two dozen Chinese semiconductor firms, two investment companies and over 100 chip making tool manufacturers, which will be added to the US entity list. Companies on this list cannot receive shipments from US suppliers without special approval.

The new rules also expand US authority to block exports of chip making equipment from US, Japanese and Dutch manufacturers made outside these countries to certain chip plants in China. Equipment made in Israel, Malaysia, Singapore, South Korea and Taiwan will be restricted under this rule, but Japan and the Netherlands will be exempt.

Following the announcement, Deputy Minister of Investment, Trade and Industry Liew Chin Tong had urged Chinese companies to refrain from using Malaysia as a base to “rebadge” products to avoid US tariffs.

More selective on FDI

Meanwhile, the domestic equity team at Nomura Asset Management Malaysia opines that over the near term, an intensified trade war between the US and China would trigger trade disruptions and a decline in regional trade flows.

“Historical experience from 2018/19 suggests that escalating trade tensions tend to lead to weaker global growth, given the impact on financial markets, consumer and business confidence.

“Similarly, Malaysia also witnessed slower economic growth over 2018/19, given its open economy. Heightened policy uncertainty could also weigh on investment decisions in the immediate term,” the firm says.

Given that Malaysia’s approved foreign direct investment (FDI) only started to see a meaningful step-up from 2021 onwards, Nomura believes the country should continue to benefit from supply chain shifts over the medium-term.

“While Malaysia has broadly benefited from supply chain diversification, plans by the US to broaden the tariff coverage to ‘Made by China’ from ‘Made in China’ could impact investment plans by Chinese firms,” it warns.

To prevent unnecessary scrutiny by the US, the Malaysian government could be more selective in approving FDIs, choosing those where there is genuine value-add proposition, says Nomura.

In addition, it says, the government can provide support to domestic companies to remain competitive despite potential tariffs via improved infrastructure, lower trade barriers, conducive policies and upskilling the labour force.

A key risk to the supply chain diversification narrative into Malaysia and the Southeast Asian region is that Asean is the fourth largest source of imports into the US after Mexico, Canada and China.

“Trump has already announced planned tariffs on Mexico, Canada and China. However, within Asean there is a great divergence between countries, with Vietnam seen as a more vulnerable target given the sharp widening of its bilateral trade surplus with the US since 2018,” says Nomura.

While Malaysia’s semiconductor sector remains resilient and poised for growth, industry players are cautious about the geopolitical complexities.

If Trump returns to power with his tough trade policies, and Malaysia’s ties with BRICS strengthen, the country will need to carefully balance taking advantage of opportunities while avoiding any punitive actions.

For now, industry leaders agree that Malaysia’s neutral stance and strategic importance in the global semiconductor supply chain remain its best defence.

But as geopolitical tensions rise and the US enforces stricter trade measures, Malaysia’s future in the global semiconductor industry will depend on its ability to adapt and handle diplomatic challenges effectively.

Source: The Edge Malaysia

Malaysia’s semicon sector needs to walk a fine line under ‘Trump 2.0’

VS Industry Bhd is optimistic about its prospects for the financial year ending July 31, 2025 (FY25), buoyed by a healthy demand outlook and significant capital expenditure (capex) plans.

The electronics manufacturing services (EMS) provider has earmarked Rm150mil for capex, with the bulk allocated to its new facility in the Philippines, acquisition of a new factory in Indonesia, and maintenance for its Malaysia operations.

Managing director Datuk Gan Sem Yam said the group’s positive outlook is supported by sustained order growth, upcoming product launches, and the group’s regional expansion efforts.

“We are upbeat on our prospects as we move into FY25. This is underpinned by the healthy demand outlook from our existing customers and our new manufacturing facility in the Philippines,” Gan said in a statement.

He said the group had secured new orders worth an aggregate Rm1.5bil over the next two years, adding that production at the new Philippine facility is set to begin in the coming months.

“The establishment of the new facility in the Philippines is progressing well with production of two secured models to commence thereafter. Renovation of our new plant is at its tail end, and we target to start production in the coming months,” he noted.

He said the group’s capex strategy reflects its commitment to scaling operations.

“These investments enable us to strengthen our foundation as we advance towards new horizons for the group,” Gan added.

For FY24, VS Industry declared a total dividend of 2.2 sen per share, amounting to a payout of Rm84.8mil, representing a payout ratio of 43.4%, exceeding its 40% dividend policy.

Meanwhile, for the first quarter ended Oct 31, 2024 (1Q25), VS Industry’s bottom line dropped by about 37.5% to Rm30.6mil from Rm49mil in 1Q24, impacted by inventory destocking from a key customer and unfavourable foreign exchange fluctuations.

Despite a slow start to the financial year, UOB Kay Hian (UOBKH) Research expects VS

These investments enable us to strengthen our foundation as we advance towards new horizons for the group. Datuk Gan Sem Yam

Industry to see sequentially stronger quarters in FY25.

“These challenges are largely one-off. Looking ahead, a stronger US dollar, seasonal tailwinds, alongside pipelines of new product launches by key customers, would position VS Industry for a stronger recovery in 2H25 and explosive growth prospects in FY26,” it noted.

UOBKH Research viewed VS Industry’s expansion into the Philippines as a significant step toward strengthening its regional presence and boosting growth prospects.

The research house said the group’s wholly owned subsidiary, VS Industry Philippines (VSIP), had entered into a lease agreement for a 570,000 sq ft factory at the Light Industry and Science Park III in Batangas, the Philippines.

“The group has also secured new orders from its key customer to manufacture selected consumer electronics products on a box-build assembly basis, with expected recurring revenue contribution of Rm300mil for FY25 and Rm1.2bil for FY26, which we believe will entail two lines of products,” it said.

UOBKH Research noted the facility’s full utilisation could generate up to Rm2bil in revenue annually.

“While we are cognisant of the execution risk considering the different market landscapes, we are net positive to the announcement,” the research house noted.

It cited several factors contributing to the positive outlook, including stronger order visibility and VS Industry’s vast experience in supporting its key customers’ sub-operations.

Favourable export tariffs from the Philippines to the United States, opportunities to boost margins by offering new services, and the chance to secure more jobs across multiple sites were highlighted as benefits.

“More so, the adoption of an asset light model could lead to a lower breakeven point for margin accretion,” it added.

UOBKH Research maintained its “buy” call on VS Industry, raising its target price to RM1.50 per share from RM1.35 previously.

“Despite a 17% recovery in its share price since mid-november 2024, VS Industry remains attractively valued at 17.1 times its 2025 price-to-earnings ratio, slightly below its five-year mean, offering a compelling entry point,” the research house said.

The stock closed one sen higher yesterday at RM1.17, marking a year-to-date gain of 3.5%.

VS Industry provides vertically integrated manufacturing solutions, serving as both an original equipment manufacturer and an original design manufacturer, catering to multinational corporations globally.

Its capabilities include high-precision printed circuit board assembly, plastic injection moulding, and tool design and fabrication.

Source: The Star

VS Industry eyes Rm150mil capex

Malaysia has long depended on low-skilled foreign labour to fill low-wage jobs that many locals avoid. These roles are often highly routine, and as the country seeks to reduce its reliance on foreign labour, automation is increasingly being seen as the key solution.

In 2022, the International Organisation for Migration estimated that there were 2.2 million migrant workers in Malaysia, forming a significant part of the 14.4 million labour force, primarily in manufacturing, construction, agriculture, services and plantations.

“As technology advances, policies like the Industry4wrd National Policy and New Industrial Master Plan (NIMP) are solving this reliance by filling this labour gap with machinery, making use of the rise of Industry 4.0 or Smart Factory technologies,” says Dr Chua Wen-Shyan, head of Malaysian Smart Factory 4.0 at the Selangor Human Resource Development Centre (SHRDC).

Manufacturers are increasingly adopting the Internet of Things (IoT), artificial intelligence (AI) and robotics to create more interconnected and intelligent systems that optimise resource management and enhance decision-making processes.

The Covid-19 pandemic significantly accelerated the digital transformation of businesses, propelling advancements by years, if not decades, Chua believes.

Since then, most manufacturing and logistics operations have embraced digitalisation. Additionally, many family-owned businesses are transitioning to the next generation, who are more inclined to adopt new technologies.

The SHRDC examines Malaysia’s labour shortage across both high-skilled and low-skilled sectors, exploring the root causes of this issue. The rise of the gig economy has drawn many workers away from traditional employment, but automation and technology present opportunities to reintegrate them into factories through more fulfilling and challenging roles.

While automation is often linked to job reduction, the reality can be quite the opposite. When factories adopt automation and digitalisation, they not only create new roles but also enhance job value. Positions that were once considered tedious can become innovative and appealing, offering competitive wages and revitalising the workforce.

And it seems to be working. While Chua could not provide official figures, SHRDC has observed a growing number of young talents entering not only manufacturing but also agricultural industries, particularly with companies perceived as forward-thinking.

Despite its advantages, automation in Malaysia’s manufacturing industry has yet to achieve widespread adoption. Chua explains that this is largely due to the nature of locally produced goods, which are often customised to client specifications. Instead of manufacturing 100,000 identical items, production typically involves only a few thousand at a time.

This low production volume makes it challenging to justify the cost of acquiring and implementing machines designed for mass production, as the returns may not appear as compelling.

“We can understand what the government is trying to do. They want to get local people to work in the factory. But when you do that without solving the problem of getting the local workforce back to the factory or even proper incentives for automation, [it creates] big challenges in the company trying to manage things right. So, they end up not being able to get enough workers and shut down,” says Chua.

As a result, SHRDC adopts a cautious approach when discussing transformation plans with companies, encouraging them to proceed only if they are genuinely prepared. Businesses are also urged to build in-house technical teams to manage the transition effectively.

Chua notes that initiatives and programmes, not only from SHRDC but also through NIMP, the New Malaysia Plan and others, play a crucial role in driving automation adoption. This shift is increasingly vital for factories, especially as government policies aim to make foreign labour more expensive and less accessible.

Rise of smart factories

Automation is adopting technologies like robots to remove the need for manual labour, while digitalisation is used to visualise the productivity of the company to analyse and improve performance.

For too many companies, the move to digitalisation is often hindered by the heavy costs and not fully understanding what it means to digitalise instead of just automate. Chua recalls times when a manufacturer he was in talks with had automated but not digitalised, and did not understand the difference between the two.

He gave an example of a factory that has 10 fully automated machines. “But how do we know these 10 machines are operating at the best efficiency, the most optimal rate? How do we see what’s the total number of outputs in a day, rejects, quality issues, downtime issues?”

Often once a company sees this value do they become more accepting of newer technologies, which SHRDC addresses through its initiatives to meet NIMP’s goal of having 3,000 smart factories in Malaysia by 2030.

Chua defines a smart factory as a robust digital factory that is highly intelligent and data-driven. In a smart factory, the entire manufacturing process is traceable from end to end, meaning the factory owner can see the entire production flow and visualise the data.

This means the entire factory is highly automated, with robots and machinery taking over much of the manufacturing process, with machines monitoring the entire line and providing real-time data that allows factory owners to review and revise things to increase efficiency.

So not only is the need for low-skilled workers like assembly line workers removed, but it also opens jobs for higher-skilled ones, like data analysts or engineers to monitor and maintain the system.

In a way, Chua sees NIMP and the push for smart factories as a rebranding of sorts for the government’s Industry 4.0 initiatives, addressing the issues it had during its implementation.

To him, the past implementation of Industry 4.0 policies by the government was very technology-focused. So, if a company wanted to digitalise they had to do a government readiness assessment and then ask government agencies for a grant.

“The message was ‘do an assessment to get the money’ instead of ‘understand where you are, understand your current baseline, then go and learn how you can improve yourself before you go and apply for funding’,” says Chua.

SHRDC has run many training programmes, worked with various universities and internship programmes and trained lecturers to spread the benefits and value of smart factories to increase adoption. Despite these efforts, he is not optimistic about meeting the NIMP goal of 3,000 smart factories.

“One year since the NIMP was launched and I think that, in my personal opinion, it’s been quiet. There’s not much talk about technology or smart factories in the past year,” he notes.

Instead, most of the discussions have been around sustainability efforts, with a lot of push from government sectors on environmental, social governance and social development goals.

Chua says this itself is not an issue, only that there is not a lot of time to reach the 3,000 smart factory goal within six years. So, the country has to move fast with a consolidated effort from all stakeholders to transform the industry, which he sees as unrealistic.

Instead, SHRDC is encouraging companies to take a standardised baseline assessment to fully understand where businesses are in their smart factory transformation journey. Once they have that baseline, they can then set more realistic numbers and set reasonable targets come 2030.

This had an interesting effect where some companies they reached out to, upon realising and hearing about NIMP, would respond with inquiries about their smart factory transformation plan and how realistic it is, which Chua notes is a great start.

“Interestingly they gave us a call and said, ‘I have a roadmap now. I want to share this with you, and you tell me whether I am dreaming or I am able to achieve it,’” he says.

Low-code platforms empowering the workforce

Another facet of SHRDC’s services is it supplies and networks companies with platforms that further help alleviate the reliance on large teams while empowering employees to accomplish tasks faster and more efficiently: low-code and no-code platforms.

Low-code platforms are digital platforms where employees can perform tasks usually done through coding, such as creating a website or software application, through intuitive drag-and-drop tools that require little to no coding knowledge.

This not only empowers existing employees but also reduces the need for large teams of those with coding knowledge, and some platform providers saw companies that adopt low-code platforms are more likely to create a workplace culture that attracts younger generations of employees.

“Low-code platforms can significantly help address Malaysia’s labour shortage in the tech and business sectors through several key mechanisms, such as the democratisation of technology development which enables non-technical business stakeholders to create AI solutions and bridges the gap between business needs and technical implementation,” says Ooi Ghee Leng, CEO of Embedded LLM (large language model).

According to Lim Chee How, CEO of low-code platform provider Tapway, the main benefit of low-code platforms is that they allow technology companies and businesses with smaller tech teams to develop solutions faster and more easily without the need to hire more developers.

Essentially, low-code and no-code platforms help democratise technology solutions and make them more affordable to the masses, allowing them to automate labour with technology solutions.

Tapway’s platform, SamurAI, is one example of this. It provides a no-code platform for companies to make their own Vision AI solution, an AI that can detect and analyse data from cameras. This reduces costs from outsourcing entire projects, while not outright removing the need for these high-skilled workers.

“The infrastructure and underlying logic of software development will still require in-depth expertise. That’s where the skilled technical professionals come in,” says Kien Yew Liang, founder and managing partner of Dallas Roboter.

Liang notes that while these platforms help with reducing costs and speeding up automation, it does not fully resolve labour shortages unless automation becomes a central business strategy.

Ooi adds, “The impact isn’t about addressing a labour shortage, as Malaysia has plenty of technical talent, but rather about enabling faster, more effective digital transformation by allowing business experts to directly implement solutions while making better use of existing technical talent.”

Technologies changing automation

These innovations in the labour force extend beyond empowering employees, they can transform the factories as a whole, making them more efficient and simpler for businesses to adopt.

Addressing the issue of integrating automation into legacy systems due to outdated software, Universal Automation offers a transformative approach to digital technology integration in manufacturing, using a modular, plug-and-produce software ecosystem, an approach Schneider Electric is championing.

Ng Wei Jie, business vice-president of industrial and process automation at Schneider Electric Malaysia, notes how through this, industrial companies can select the automation technology they need, matching applications into one seamless automation system built on the IEC 61499 standard, the international standard for these infrastructure systems.

“It enables industrial operations to fully realise their digital evolution with software-defined automation solutions, just like the EcoStruxure Automation Expert, our world-first hardware-agnostic industrial automation system,” he says.

On the other side, transforming entire factories at once, new technologies like AI has shown to be another proponent of change to address the challenges of low-skilled labour while drawing high-skilled ones into industries once thought unrelated.

In November, local AI company Airei opened Malaysia’s first AI-based palm oil mill at Minsawi Industries in Kuala Kangsar, Perak. Reporting a decrease in labour by about 30%, Airei removed routine jobs like an operator who opens and closes doors to place palm fruit on the mill conveyor belt.

While this partly affected some domestic jobs, it removed the need for jobs to be often filled by foreign workers.

The AI-based mill works by replacing those repetitive-task jobs with machinery. Doors and mechanics run automatically and are monitored using vision AI to dictate when to move the process along. Instead of relying on manual labour, the focus shifts to AI engineers who maintain and improve the system.

“We are trying to minimise those very basic kinds of jobs, and we are replacing them with AI. At the same time, for those guys who are no longer working, we are telling them to do other things, like taking up training to learn welding skills. We don’t want people to just sit down doing repetitive jobs. That’s what we are trying to eliminate,” says Airei CEO Surendran Kuranadan.

The biggest challenge when implementing this system was that you could not turn off the mill and install these systems, he says. His team had to install these technologies while the mill was still in operation, except for a seven-hour window on Sundays to ensure production was not hindered.

The other challenge is that this mill is the first of its kind. Much like smart factories, a lot of the plan moving forward is convincing factory owners of the value of this technology, and that mills no longer need to rely on labour for repetitive tasks.

This comes back to even the impetus of the entire AI-based mill project: addressing a problem that arose during the Covid-19 pandemic, when finding labour was difficult and the idea to create a mill less reliant on foreign labour was born.

With the introduction of advanced platforms like Universal Automation, AI-based mills and smart factories, there are signs of a transformative shift that emphasises a need for upskilling and reskilling of local talent to meet the demands of a more automated and digitally integrated manufacturing environment.

Source: The Edge Malaysia

Automation: Shifting to intelligent manufacturing

Electronic manufacturing services (EMS) player SP Manufacturing has strengthened its global footprint by opening a new manufacturing facility in Senai, Johor.

Established in 2000, SP Manufacturing provides design to full production services, specialising in high-quality cable harnesses, printed-circuit-board (PCB) assemblies, and box-build products for mission-critical industries that include automotive, and aerospace.

The facility in Senai which opened in October, is equipped with comprehensive manufacturing capabilities, including functional testing; in-circuit testing and automated optical inspection (AOI); state-of-the-art cleaning processes; rigorous inspection protocols and rapid prototyping and expert assembly processes. It enhances the company’s resilience to meet growing customer demands in medical devices, industrial machinery and automotive electronics.

The facility is equipped with advanced automation and strict quality controls which enable SP Manufacturing to deliver mission-critical products with precision and reliability.

“This facility reflects our commitment to serving our global customers while participating in a key location of the global supply chain network,” said SP Manufacturing global business development Jackson Tan.

The Singapore-based company also said it has acquired Ideal Jacobs Corporation, which is known for its human-machine interface, printed electronics and die-cut solutions.

The announcement was first made in November 2024.

The move will expand SP Manufacturing engineering capabilities and provide access to a diversified client portfolio including semiconductor and telecommunications.

SP Manufacturing added that it continues to provide comprehensive engineering and design services for its customers in the United States, using industry-standard software for PCB and electrical design.

Source: NST

EMS company SP Manufacturing sets up plant in Senai, Johor